Authorities found the severed head nearby, in Saint-Quentin-Fallavier in southeastern France. Arabic writing was scrawled across it and it was placed next to two jihadi banners.

Sources close to the investigation said the suspect sent a picture of himself with the head to a North American number via the WhatsApp messaging service.

Investigators are still working to determine the identity of the recipient of the message.

Salhi, 35, a father-of-three, has been described by a work colleague as being mysterious and deceptively calm. Co-worker Abdel Karim told RTL radio: "He was a wolf in sheep's clothing. He had already talked to me about Daesh (one of the names for the Islamic State group)."

The 55-year-old victim is said to be Salhi's boss at a local transportation company.

Salhi's wife spoke of her shock on discovering that her husband had carried out the attack. "We are normal Muslims," she said. "It is Ramadan. We have three kids and a normal family life."

Salhi, who is from Saint-Priest, just outside of Lyon, was known to anti-terror police for radicalisation. A file had been opened on him in 2006 for radicalisation - meaning he should be watched - but it was not renewed in 2008 and authorities no longer deemed him a risk.

The suspect had a 'link' to the Salafi movement, a group within Sunni Islam, but was not implicated in any terrorist activities and had never been convicted of a crime.